Changing Face of Gaming Retail in India

by Sudipto Majumdar, CTO, Zapak Digital Entertainment

For the last 13 years, the internet industry and the consumers have been waiting to exhale. Ever since the first commercial internet connections were issued in 1995, India has been in the backwaters of the internet world. This has been due to the lack of a large critical mass of internet users in India. It is a well lamented fact that the cause of this is lack of broadband infrastructure and computers being unaffordable for the common man.

After 13 years the situation does not look to change significantly. While China has over 200 million internet users we have barely 40 million by the most optimistic estimates. While China has nearly 70 million broadband connections we have barely 3 million. While China has over 120 million home computers our best estimates are 10 million.

Let’s face it. Our realities are not going to change overnight. Neither will our infrastructure suddenly leapfrog to any significant level, nor will average Indians suddenly become rich to be able to afford home computers. So is the average Indian doomed to live a net deprived life for the foreseeable future and grow up as a generation of digital have-not? Well maybe not, for there is a quiet revolution going on at the ground swell.

As usual private enterprise is picking up the thread and delivering what our government could not. Like many similar phenomenon, it started as a means to fulfil the latent entertainment of the youth, because the traditional entertainment channels dominated by middle aged people just did not get the concept of digital interactive entertainment, because they never grew up with it. Some even dismissed it as a frivolous activity. However it is turning out to be not just a magnet for the youth but is establishing a foundation of digital infrastructure which will save the nation from being deprived of digital exposure, so that our youth do not grow up disadvantaged in an increasingly digital savvy world.

I am talking of the gaming café. Now we all know of internet café, also known as cyber café. So what is a gaming café? It started when many internet café stores started realizing a pattern in their customer profile analysis. 40 to 80 per cent of the occupancy of their café depending on the location was not surfing the web or checking mails, they came to the café as a group just to hang out and play LAN games against each other. While some also checked their mails, some were not interested in the internet at all. It was as if these users came to these café not for some task oriented purpose.

This social phenomenon was quickly recognized and attributed to the fact that kids perhaps did not have computers at home or the right kind of PC specs or internet connectivity. While this analysis was partially true, what came as a surprise was that even in a country like Korea, where there is 95 per cent penetration of home PC and broadband, 50 per cent of 'PC Bang' (Korean for cyber café) was occupied by gamers. More over these gamers were also playing and practicing at home. However they preferred to play at cafes with their friends whenever possible. It was realized that it is not just about accessibility. Youth want to converge at one place and play against each other, scream and shout as an outlet for social interaction.

Traditional internet cafes usually do not have the ideal ambience or environment for youths to hang out as they are small and dingy. Older age group people also come there for 'serious' stuff and expect some amount of decorum and silence. With a significant chunk of the café clientele at loggerheads with the rest of the customers, entrepreneurs seized on the opportunity. Born was the gaming café; where you were encouraged to shout and taunt; where the atmosphere was as anonymous as you would like it to be for you to immerse in the fantasy worlds of these games.

It first started in Korea, then China, and India is slowly catching the fever. In India all the factors are in favour of the mushrooming of the gaming café. We are and will remain a shared access country for a long time. This means that the only way to break the digital divide caused by un-affordability is to share the computers and the broadband infrastructure. Indian youth are deprived of entertainment avenues, and gaming is frowned upon due to misconception about them amongst parents. This is especially true in the smaller cities and towns; a point proved by the fact that Zapak’s gaming café in smaller cities and towns do a lot more business on average than big cities where there are many more entertainment avenues for the youth.

So the youth in India is starting to hang around in these gaming cafes instead of malls (or because there is no mall in their city) to entertain, socialize and also pick up digital skills as a side benefit.

Organizations like Zapak are not only entertaining the youth, they are littering the country with digital infrastructure of high-end computers connected to the world with very high speed connections. Gaming being a bandwidth and performance intensive activity, the specifications of the computers are very high and the connections are very high speed; sometimes as high as 25 MBPS.

If one steps back and thinks about this; one can realize the strategic implication of this for both a company like Zapak as well as the country in general. We would have created a retail high speed digital delivery infrastructure, which is capable of delivering anything from high definition movies to live classrooms for distance learning. It could enable access for the common man to any service which is out of his reach because of high bandwidth requirement or high PC specifications.

It would in one stroke enable a commanding retail reach for the company to sell literally anything digital across the country; a distribution reach which is a marketer’s dream. It would also serve the country in ensuring that youth of this country do not grow up as digital have-nots. While Zapak would set up nearly 3,000 retail outlets across the country with 65,000 gaming seats in the next three years, it is still a drop in the ocean. The need in this country is far more.